Journal Report

The Wall Street Journal's Walt Mossberg and Kara Swisher spoke with Apple's new chief executive officer, Tim Cook, about the future of the company's signature product lines, and what he plans to change—and keep the same. Here are edited excerpts of their conversation.

Where They're At

MS. SWISHER: What is the state of Apple under Tim Cook?

MR. COOK: It's an absolute incredible time to be with Apple. I'm loving every minute of it, and I think everybody at Apple is loving it, too. The juices are flowing, and we have some incredible things coming out.

And, of course, the company is very healthy. iPhone is doing great. The Mac has had a string of incredible quarters. iPad has been a knockout, and we're in the first inning on it.

MR. MOSSBERG: The public is going to be exposed to a different approach to tablets from Microsoft this year. They look at a tablet and a PC as a continuum that can run on one operating system and can come in many form factors. What's wrong with that?

ENLARGE

TIM COOK: 'Apple has a culture of excellence that is, I think, so unique and so special. I'm not going to witness or permit the change of it.'
Asa Mathat/All Things Digital

MR. COOK: The tablet and the PC are different. The more you look at a tablet as a PC, the more the baggage from the past affects the product.

Moving On

MR. MOSSBERG: Apple has undergone a tremendous change, a big loss, with the death of Steve Jobs. How is Apple different with you as the CEO? What did you learn from Steve?

MR. COOK: What did I learn from him? We could be here all night, probably all week and maybe a month. I learned that focus is key, not just in running a company but in your personal life. You can only do so many things great, and you should cast aside everything else.

I also learned that in the business that we're in, owning the key technology of a product is very important. And doing things great—not accepting good or very good but only the very best. Apple has a culture of excellence that is, I think, so unique and so special. I'm not going to witness or permit the change of it.

MS. SWISHER: You won't permit it to change, but things do change.

Apple CEO Tim Cook made it clear onstage at D10 that there's one area in which Apple wants to be as open as possible: Manufacturing.

MR. COOK: Another thing that Steve taught us all was to not focus on the past. If you've done something great or terrible, forget it and go on and create the next thing. When I say that I'm not going to witness or permit the change, I'm talking about the thing that's most important in Apple—the culture of Apple. Am I going to change anything? Of course.

MR. MOSSBERG: Such as the philanthropic actions?

MR. COOK: Apple has started a matching-gift program. It allows us to reach thousands of charities, without the bureaucracy of committees meeting to conclude whether this one is good or this one is good—we let the employee decide.

We did the right thing—or will do it later in the year—of starting dividends and doing share buybacks. We're going to invest like crazy in R&D and continue to build our stores.

We're also going to double down on secrecy on products. However, there are going to be other areas where we're going to be the most transparent company in the world—like social change, supply responsibility, what we're doing for the environment.

MS. SWISHER: Assess the China situation.

Tim Cook won't say a word about his Apple TV plans. But he is willing to explain what he thinks about his current Apple TV product: It's a little different from his other products, because it's not a big hit. And that's okay.

MR. COOK: In terms of how are the factories doing, this year, as an example, we've put a ton of effort into taking overtime down. Some people wanted to work a whole lot because they want to move and work for a year or two and then move back to their village and bring back as much money as they can. We've said we're going to bring this down, and in the last month we were at 95% compliance.

We're measuring working hours for 700,000 people. And we're reporting it. You could go on our website and see precisely what the work hours are.

MR. MOSSBERG:Will there be an Apple product ever made again in the United States?

MR. COOK: I want there to be. Already, the engine for the iPhone and iPad is built in the U.S., in Austin. The glass on your iPhone is made at a plant in Kentucky. There are things that can be done in the U.S., not just for the U.S. market, but that can be exported for the world.

MS. SWISHER: How do you look at the competitive landscape in the smartphone market?

MR. COOK: We have the best phone, but you have two operating systems that make up the vast majority, IOS and Android, and you have Windows Mobile now beginning to ship. RIM is still serving some large number of enterprise customers, but the momentum right now is in the first two. Anything can change, because the smartphone revolution is still in the early stages. The opportunity here is huge, and there can clearly be changes along the way.

Tim Cook learned a lot from Steve Jobs, and one of the big takeaways seems to be: Don't tip your hand. The Apple CEO was unwilling to tackle questions about any future product plans during his first appearance on the D10 stage.

MR. MOSSBERG:At any one time, there is only one new iPhone. That's not the way you did it with the iPod; that's not the way you did it with the Mac. Why don't you have more than one iPhone, and why don't you have more than one iPad?

MR. COOK: Our North Star is to make the best product. Our objective isn't to make this design for this kind of price point or make this design for this arbitrary schedule or line up other things or have X number of phones. I think one of our advantages is that we're not fragmented. We have one app store, so you know what app store to go to. We have one phone with one screen size with one resolution, so it's pretty simple if you're a developer developing for this platform.

MS. SWISHER: Steve talked a lot in his last appearance here about wanting to change television. How are you looking to change television, from what he was talking about initially?

MR. COOK:We've stayed in the Apple TV business. It's not the same market size as our other businesses, but last year we sold a little less than three million Apple TVs—and just in the first six months of this year, we've sold 2.7 million.

This is an area of intense interest for us. We're going to keep pulling the string and see where it takes us.

MR. MOSSBERG: You don't have a lot of content on Apple TV.

MR. COOK: We have lots of movies.

MR. MOSSBERG: There's Netflix movies, of course, but everybody has Netflix. I have to buy the TV shows, though. So you're not solving every problem that a person might have with the TV with your current product.

MS. SWISHER: How is your relationship with Hollywood in that regard, in terms of getting everything?

MR. COOK: I think we have very good relationships with the content owners. We don't want their stuff to be ripped off.

MR. MOSSBERG:On my Apple devices, there's a menu that comes up for sharing. Twitter is all through it. Facebook is not. Will you ever strike a deal?

MR. COOK: I think the relationship is very solid. We have great respect for them. I think we can do more with them. Stay tuned on this one.

MR. MOSSBERG: At least at the moment, Siri is your principal way of selling the iPhone 4S. When it works, it works really well, but a lot of times, it doesn't work. Is that product up to your standards?

MR. COOK: It's one of the most popular features of iPhone 4S. But there's more that it can do, and we have a lot of people working on this. I think you'll be pleased with some of the things that you'll see over the coming months.

MS. SWISHER: What's your goal? Become a trillion-dollar company?

MR. COOK: I just want to build great products. If we do that, the other things follow.

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